The crypto markets are slowly starting to deliver all of the tools traditional financial markets have had for years. The latest expansion is focused on options markets and Hedgey Finance is one of the first platforms to enable permissionless peer-to-peer options trading for crypto assets, along with native pools where traders can purchase customizable options.
What Is Hedgey Finance? #
Hedgey Finance is an options trading platform that is available on Fantom, Harmony One and Gnosis (former xDAI). It enables both buyers and sellers to create offers and trade options without the need of a third-party intervention.
Sellers create option offers that are fully collateralized and buyers pay a premium depending on market conditions before and after the option purchase. Recently the protocol has included their own pools where users can purchase options directly from Hedgey, if the peer-to-peer market doesn’t have an acceptable offer for them.
How To Use Hedgey Finance? #
To use Hedgey you will need to add one of the three above mentioned networks to your Metamask wallet. In this example we will be using the xDAI or Gnosis chain. To add this network to your Metamask wallet, open the dropdown menu and select “add network” and enter the following information:
Network Name: Gnosis Chain
New RPC URL: https://rpc.gnosischain.com
Chain ID: 0x64
Block Explorer URL: https://blockscout.com/xdai/mainnet
Click save and Gnosis will be added to your list of networks.
Transaction fees on this network are paid in xDAI so you will need to send some to your wallet. Ramp Network has a fiat onramp for credit card payments and if that is not an option you can always use the xDAI faucet and bridge some funds over from other chains using xPollinate or Hop Protocol.
After everything is set up connect your wallet to Hedgey Finance and select Gnosis Chain on the left side of the screen.
This will give you a screen with available options for thick chain only, but this platform is for sellers as well. If you want to create your own pool, select that option and follow the instructions on the screen.
For buyers, the process is very simple. If, for example, you wanted to purchase 10 HNY options, simply enter the amount in the pool and click the buy button.
Always make sure that you are comfortable with the expiry date and price before purchasing. On Hedgey, any purchased options can be exercised before the expiry date and profitable options can be cashed out at any given moment, but also before the expiry date.
After the transaction is confirmed your options will be visible in your portfolio. If you want to purchase single option contracts from the peer-to-peer market, simply switch from “pools” to “singles”.
It is worth mentioning that the P2P market works both ways so any options that you purchased on Hedgey can be sold on the singles market as long as a buyer is willing to fill out your sell order.
Also, if you are not familiar with options trading it would be best to learn more about it from the Hedgey Finance documents before investing.
Options trading has always been a hedge against market conditions in traditional finance and now it is also available in crypto thanks to Hedgey Finance and many other platforms like it. The peer-to-peer marketplace is certainly an innovation in the crypto industry and if used correctly, it can be a very useful tool for traders and investors alike.